Constellation Brands (LTS:0REP) Beneish M-Score

: -2.75 (As of Today)

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The zones of discrimination for M-Score is as such:

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator.
An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Good Sign:

Beneish M-Score -2.75 no higher than -1.78, which implies that the company is unlikely to be a manipulator.

The historical rank and industry rank for Constellation Brands's Beneish M-Score or its related term are showing as below:

LTS:0REP' s Beneish M-Score Range Over the Past 10 Years
Min: -2.75 Med: -2.58 Max: -2.34
Current: -2.75

During the past 13 years, the highest Beneish M-Score of Constellation Brands was -2.34. The lowest was -2.75. And the median was -2.58.

Constellation Brands Beneish M-Score Historical Data

The historical data trend for Constellation Brands's Beneish M-Score can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Constellation Brands Annual Data

Trend

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

Feb24

Beneish M-Score

-2.43

-2.70

-2.61

-2.74

-2.75

Constellation Brands Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
Beneish M-Score																-2.74	-2.64	-2.66	-2.63	-2.75

Competitive Comparison

For the Beverages - Wineries & Distilleries subindustry, Constellation Brands's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Constellation Brands Beneish M-Score Distribution

For the Beverages - Alcoholic industry and Consumer Defensive sector, Constellation Brands's Beneish M-Score distribution charts can be found below:

* The bar in red indicates where Constellation Brands's Beneish M-Score falls into.

Constellation Brands Beneish M-Score Calculation

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Constellation Brands for today is based on a combination of the following eight different indices:

-4.84

0.92 * DSRI

0.528 * GMI

0.404 * AQI

0.892 * SGI

0.115 * DEPI

-4.84

0.92 * 0.7531

0.528 * 1.0023

0.404 * 0.9467

0.892 * 0.9738

0.115 * 1.0438

0.172 * SGAI

4.679 * TATA

0.327 * LVGI

0.172 * 0.9126

4.679 * -0.02124

0.327 * 0.9044

-2.80

This Year (Feb24) TTM:

Last Year (Feb23) TTM:

Total Receivables was CHF730 Mil.
Revenue was 1876.292 + 2199.595 + 2491.561 + 2257.626 = CHF8,825 Mil.
Gross Profit was 911.482 + 1131.088 + 1273.447 + 1129.127 = CHF4,445 Mil.
Total Current Assets was CHF3,271 Mil.
Total Assets was CHF22,534 Mil.
Property, Plant and Equipment(Net PPE) was CHF7,065 Mil.
Depreciation, Depletion and Amortization(DDA) was CHF379 Mil.
Selling, General, & Admin. Expense(SGA) was CHF1,638 Mil.
Total Current Liabilities was CHF2,756 Mil.
Long-Term Debt & Capital Lease Obligation was CHF9,368 Mil.
Net Income was 344.174 + 453.201 + 606.027 + 121.997 = CHF1,525 Mil.
Non Operating Income was -30.172 + -37.21 + -17.742 + -373.533 = CHF-459 Mil.
Cash Flow from Operations was 379.96 + 645.217 + 840.182 + 597.33 = CHF2,463 Mil.

Total Receivables was CHF996 Mil.
Revenue was 1849.563 + 2353.659 + 2541.993 + 2316.881 = CHF9,062 Mil.
Gross Profit was 889.879 + 1185.185 + 1269.417 + 1230.402 = CHF4,575 Mil.
Total Current Assets was CHF3,237 Mil.
Total Assets was CHF22,832 Mil.
Property, Plant and Equipment(Net PPE) was CHF6,540 Mil.
Depreciation, Depletion and Amortization(DDA) was CHF367 Mil.
Selling, General, & Admin. Expense(SGA) was CHF1,843 Mil.
Total Current Liabilities was CHF2,748 Mil.
Long-Term Debt & Capital Lease Obligation was CHF10,835 Mil.

1. DSRI = Days Sales in Receivables Index

Measured as the ratio of Revenue in Total Receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI	=	(Receivables_t / Revenue_t)	/	(Receivables_t-1 / Revenue_t-1)
	=	(730.449 / 8825.074)	/	(995.976 / 9062.096)
	=	0.08277	/	0.109906
	=	0.7531

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI	=	GrossMargin_t-1	/	GrossMargin_t
	=	(GrossProfit_t-1 / Revenue_t-1)	/	(GrossProfit_t / Revenue_t)
	=	(4574.883 / 9062.096)	/	(4445.144 / 8825.074)
	=	0.504837	/	0.503695
	=	1.0023

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.

AQI	=	(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t)	/	(1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
	=	(1 - (3271.144 + 7065.216) / 22534.19)	/	(1 - (3236.689 + 6540.036) / 22832.357)
	=	0.541303	/	0.571804
	=	0.9467

4. SGI = Sales Growth Index

Ratio of Revenue in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI	=	Sales_t	/	Sales_t-1
	=	Revenue_t	/	Revenue_t-1
	=	8825.074	/	9062.096
	=	0.9738

5. DEPI = Depreciation Index

Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI	=	(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1))	/	(Depreciation_t / (Depreciaton_t + PPE_t))
	=	(367.067 / (367.067 + 6540.036))	/	(379.027 / (379.027 + 7065.216))
	=	0.053143	/	0.050915
	=	1.0438

Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.

6. SGAI = Sales, General and Administrative expenses Index

The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI	=	(SGA_t / Sales_t)	/	(SGA_t-1 /Sales_t-1)
	=	(1637.635 / 8825.074)	/	(1842.639 / 9062.096)
	=	0.185566	/	0.203335
	=	0.9126

7. LVGI = Leverage Index

The ratio of total debt to Total Assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase in leverage

LVGI	=	((LTD_t + CurrentLiabilities_t) / TotalAssets_t)	/	((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
	=	((9368.393 + 2755.585) / 22534.19)	/	((10835.471 + 2748.052) / 22832.357)
	=	0.538026	/	0.594924
	=	0.9044

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA	=	(IncomefromContinuingOperations_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(NetIncome_t - NonOperatingIncome_t	-	CashFlowsfromOperations_t)	/	TotalAssets_t
	=	(1525.399 - -458.657	-	2462.689)	/	22534.19
	=	-0.02124

An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.

Constellation Brands has a M-score of -2.80 suggests that the company is unlikely to be a manipulator.

Constellation Brands Beneish M-Score Related Terms

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Constellation Brands (LTS:0REP) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Alcoholic » Constellation Brands Inc (LTS:0REP) » Definitions » Beneish M-Score

Comparable Companies

Traded in Other Exchanges

STZ:USA STZ:Mexico CB1A:Germany STZB34:Brazil STZ:Austria

Address

207 High Point Drive, Building 100, Victor, New York, NY, USA, 14564

Website

https://www.cbrands.com

Constellation Brands is the largest provider of alcoholic beverages across the beer, wine, and spirits categories in the U.S., generating 80% of revenue from Mexican beer imports under top-selling brands such as Modelo and Corona. The rest of the business includes some remaining wine and spirits brands, categories where the company continue to prune assets in recent years. With its exclusive rights tied to the Mexican beer brands effective only in the U.S., the firm has small revenue exposure to international markets. Constellation owns a 36% stake in no-moat Canopy Growth, a medicinal and recreational cannabis producer in Canada, and has a 50/50 joint venture with glass manufacturer Owens-Illinois in Mexico.

Constellation Brands (LTS:0REP) Headlines

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